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GENERAL WILLIAM NASH (RET.): What we're going to do here is we're going to just do a couple of headlines if you don't mind; maybe a lead paragraph or two on a couple of the issues, and then let you all ask questions and we'll just take the discussion to where we're going on.

I'm joined today by Doug Holtz-Eakin, who is a director of the Greenberg Center for Geoeconomic Studies and the Paul Volcker Chair in International Economics here at the Council, newly arrived, former director of the CBO, and a lot of time in the White House as well, so a real addition to the Council staff.

Our newest guy fought 270 to come down from Carlisle, where he's moving from. Steve Biddle here is going to be our senior fellow for defense policy. As with Doug, an author, a good guy, a thinker, and it's a real pleasure. I finally have somebody around the Council I can go to and ask defense questions, so it's a good deal for me. So what I thought we'd do is let them say a few things -- few words, about four or five minutes, and then we'll let the discussion flow and answer your questions, try to round out your view of that. And we'll start with Steve who will kind of give us, if you will, a strategic overview of sorts of that and a few comments on the QDR itself.

Sir?

STEPHEN BIDDLE: Bill and Anya both told me to be brief, so I'll be as short as I can. Back when the QDR process started for this round, people tended to frame the thing up as a fundamental choice about what sort of military we wanted to have in the future. Was the secretary of defense going to retain the high-tech, capital-intensive, speed-oriented transformation concept intended primarily for waging major combat operations or for dealing with potentially emerging peer competitors, or was he going to go to a lower-tech, labor-intensive, lower capital military with an emphasis on persistence oriented towards low intensity conflict, counterinsurgencies of the kind we're waging in Iraq and Afghanistan, counterterrorism, and other lower intensity challenges?

And the expectation was that as the cost and the difficulty of the Iraq and Afghan campaigns mounted, that this QDR would end up being a forcing function that would compel a choice between these two competing and not easily mutually coexisting alternative views of the future of what kind of military we wanted. The great irony of the QDR that we got, of course, is that they decided they'd do both. Why choose? (Laughter.) So none of the trade-offs embodied in that fundamental choice have been drawn. Instead, the document basically tries to do everything involved with both of those futures and build both of those militaries.

Now, sooner -- Doug is going to talk more about the financial issues associated with this. I'll let him do that rather than me, but sooner or later you're going to have to pay the piper here. And I don't think you can do both simultaneously and punting this way on basic trade-offs represents a fundamental refusal to do strategy. I mean, strategy is ultimately about making choices and resolving trade-offs and doing something and not something else. And this document more or less steadfastly refuses to do that.

I want to say, there are a variety of strands that one could follow from that overall characterization of the document as a refusal to make the choice that everyone thought it was going to force. I'll just pick one and then stop, which has to do with the whole concept of working with partners. One of the ways that the document says it's going to provide the resources to do all these things simultaneously is by shifting the burdens onto somebody else. We'll get somebody else to do it. We'll work with partners who will provide the labor and provide some of the military resources needed to do the kinds of low intensity, nation-building, counterinsurgency tasks the document says we need to do. And that can work marvelously well.

Obviously in the Cold War, NATO was a pretty effective device for sharing burdens, sharing risks, sharing costs, and advancing the mutual interests of all the parties involved, but there were a variety of conditions that were required for NATO to play that role effectively.

First of all, it was heavily institutionalized. I mean, much to my enjoyment through those years, I spent a lot of time going to NATO meetings in a big building that existed to house this institution. It was a very elaborate organizational device for facilitating that sort of cooperation. Secondly, the states involved were very similar in many respects. I mean, no two allies have identical interests, but the political interests of most of the NATO membership were pretty darn close.

Now we are in an environment where the administration refuses to institutionalize our relationships with our partners. They don't want formal alliances. They want to make and then abandon our relationships a la carte as circumstances indicate. Well, that makes it a lot harder to get the kind of cooperation that they're apparently going to rely on rather heavily to pay the bills associated with doing everything at once.

Secondly, they want to be able to partner with a very wide range of states whose degree of similarity of underlying political interest isn't anything like the Western powers during the Cold War as members of NATO, and that creates a variety of problems for us. For starters, there's every reason to believe that this isn't going to be quite so efficient as the burden-shifting device as one might hope if we're going to rely on it the way the document says we're going to rely on it, so it might very well not work.

Not only might we be dealing with people whose political interest make them disinclined to be all that helpful to us, we may also be dealing with allies who aren't militarily capable in providing the assistance we want. In Afghanistan, for example, which in some ways is the implicit model for the sort of relationship, the Northern and later Southern Alliance in Afghanistan did in fact provide large scale ground forces that were central for the ability of the campaign to unseat the Taliban, but within that rather heterogeneous mix of allies were entities of very different military potential, which performed very differently in the field, some of which succeeded in doing what we needed them to do and others failed utterly in doing that. The degree of variance out there and the military potential of prospective allies to pick the burdens that we're asking them to pick up is unclear.

Secondly, it may force us to deal with people who are politically unsavory in ways that make the democratization goal of the nation's larger grand strategy very difficult to carry out. There's a certain tension between working with partners and transforming the regimes of partners -- (laughter) -- understandably enough. So this is not necessarily the simple, frictionless, easily shifting, easily manipulated way to share the burdens of the document at least might lead one to suspect, and with that I'll stop.

NASH: Just to add on, if I could, to Steve's comments about the good old days in NATO. One of the things that translated the meetings in the big buildings was that from the day I was a captain -- from the time of being a captain to a major general serving in Europe over a period of 10 years working with the armies of NATO was a daily routine where, I mean, even if you were down shooting at Grafenwoehr there was always a German unit or a Belgian unit or somebody down there also. If nothing else, you had to beer with them and talk about business at the club at night, but you really were spending (exercise light ?) and even in the occasions after the wall fell, when we went off to Desert Storm, my brigade partner -- brigade commander asked me to carry his colors with us when we went off to the desert. I don't think that happened this time around -- (laughter) -- within the partnership organization. But we carried his brigade colors as well as our own and in a rather large ceremony upon return, of course, presented them back to him.

Division commander days before with trotted off to Bosnia, which was the very essence of the coalition operation, the partnership for peace business because we had lots of troops, lots of density working with that, so we were able to build that coalition. And the fact that 12 nations in my division and 35 nations in the corps all came together in Bosnia and worked reasonably seamlessly is a tribute to that long-standing series of meetings that take place in Mons or Brussels, but that then translates all over.

Now, this QDR was intentionally moved in time to coincide with the submission of the budget. This may raise some questions as to the political influences on the defense review because of the budget implications; obviously, the budget being a political document.

MR.: Shocked. (Laughter.)

NASH: Yeah, I mean I'm sorry I told you. (Inaudible.)

BIDDLE(?): That's been happening all these years. (Laughter.)

DOUGLAS HOLTZ-EAKIN(?): Oh, so that's what it's about?

BIDDLE(?): You never suspected that.

NASH: So let's turn to Doug and let him put this choice issue in the context of trying to divide -- well, what we'd like to think is a fixed pot, but who knows?

HOLTZ-EAKIN: Well, thank you. And I think Steve framed it pretty well. Going into the QDR, the basic budgetary lay of the land was pretty simple. There was a base budget for the Pentagon and then there was the set of, in principle, one-off supplemental appropriation bills each year, which would finance operations in Iraq and Afghanistan. And I think the base defense budget was clearly something of interest because as much attention as it had gotten and as rapidly as the Pentagon had grown under this administration, it didn't come close to fulfilling the costs of the stated defense policy. The combination of transformation, which was pricey, R&D and testing and procurement deployments, the purchase of legacy systems to make up for what was just a big holiday in the '90s, and then paying the troops. The base budget for troops is going up a lot. So there was a big mismatch already between the policy and what it cost up here and the budget for the Pentagon down here, and the QDR essentially didn't change that. I think that really was one of the important things. There was no choice made about that; and perhaps because when they looked at it, they realized that it was all really hard, and so they didn't.

The one thing, at least, to my eye that the QDR did was it embraced this notion of the long war and essentially said the stuff that we've been calling one time as what we're going to do all times. And this distinction between the supplementals and the base budget had gradually lost a lot of meaning anyway. Things in the supps were being used base purposes, but I think really we have to -- we've, to some extent, seen the answer to the question would the policy come down to the budget or the budget come up to the policy. The budget's going up because they are counting on the money to fund this thing. And I think that's a pretty interesting thing that comes out of this.

Within that, there're some questions I have. I'm the budget guy. I'm not the strategy guy, but there are some things in this that I can -- I have four that jump out at me. The first is just the pressures on bodies and the notion that as the force comes more expensive and as they really don't want to pay for reserves and they certainly don't want to have to recruit reserves in the current environment whether we are going to move away from this integration of the reserves with the deployable force and change the structure of the military as a result. If they do that, they will have to rely more on private contractors, which at the moment looks like something no one's thought through. I could be wrong about that, but I don't think we know how we are going to deal with these contractors. That's one thing that jumps out.

Now, the second is sort of matching up the troops and the equipment purchases. They have all these special ops guys, but I thought they required different equipment. I didn't see anything that said they were going to change the equipment. They are just going to get a bunch of special ops guys, so I'm curious how that plays out.

The other thing that didn't seem to be addressed is all the -- there's tons of R&D, but we never buy this stuff at the other end, so the budget don't seem to match up very well with the long haul; tons of R&D but no procurement. So that's a question that -- as you go forward.

And then the last one -- one of those fine dividing lines of the Eisenhower discussion we had at the beginning brought this back to mind -- this fine dividing line between defense policy and economic policy. It looks like we're going to buy, you know, maybe four ships if there's enough money and we have six shipyards. And I'm just trying to figure out how we're going it's going to work. So, you know, there's been this business of keeping the shipyards employed, but I -- there's a big tension here about how this is all going to play out. And so the QDR, much like the president's budget of course, isn't something that will actually happen -- (laughter) -- because the Congress is going to stick its 535 busy little minds into modifying it. It will be interesting to see how it plays out. I'll just stop there.

NASH: You raised a very interesting issue about this growth in special operations forces and stuff and whether there's a personnel/equipment match because --

HOLTZ-EAKIN: I'm not saying there's a mismatch. I just didn't see a discussion.

NASH: Yeah. No, I understand. It's a very -- it's one of these big hand sweeps over the map. We are going to increase our special forces. One of the things about special forces is they're special, and you don't grow special as fast as you grow regular. And I don't know how much tension there is in the Army about that, but it's a process where you got to go through quite a routine and it is not a quick fix either. So it -- that, too, is one of those things that concerns --

BIDDLE: A lot of shortfall right now.

NASH: Yeah.

BIDDLE: I mean they are running it 50, 60 percent in the Delta teams and --

NASH: Well, and that's right. And guess who Blackwater wants to hire?

BIDDLE: Of course.

NASH: You know, at X amount --

BIDDLE: Yeah, at (300?) thousand a year.

NASH: Yeah. At X amount more, so you get into the competition where you got a retention issue once you make them special.

BIDDLE: Yeah.

NASH: So it's an interesting thing.

QUESTIONER: Do we -- do we know on that? I mean --

NASH: Go ahead.

QUESTIONER: (Linda ?) might know answer, but the -- my understanding has always been that in fact the number of people within the Army, or indeed within the potential recruiting base, who actually have the capabilities to become special forces, either capabilities of intellect or capabilities of physical fitness and stuff, is actually quite a small percentage of the population, and quite a small percentage of the Army. I mean, a significant number of people who apply from the Army don't make the cut.

Do we actually know that we have enough people in the Army who want to make -- you know, who wants to do this and can meet the standards of this greatly increased force?

BIDDLE: The sense I've gotten is that the reason the number is 15 percent on the size of the increase is because the Army has always maintained the 10 percent as about as much as we really want to do. Office of Secretary of Defense for a long time now has wanted a much bigger expansion and I think this is a number sort of in the middle.

QUESTIONER: Oh, I get you. Yeah.

BIDDLE: My sense is that most planners I've talked to feel comfortable with something like 10 percent as an expansion. And I don't think 15 is so much higher than that that it will break the process, but Bill raises an important point, which is you're not going to get the results very quickly.

NASH: No.

BIDDLE: You say that we want to expand SOF by 15 percent. Well, it's going to be a while before that produces any actual increase in the number of deployable Special Forces operators.

QUESTIONER: Is it possible to take some of the jobs, duties, missions that the Special Forces have right now and move them to the conventional Army? We have a lot of conventional soldiers training armies in Iraq; that's been the bread and butter of the Special Forces for a while. Could you expand your sort of Delta capabilities by taking away the training capabilities from the Green Berets, SEALs, et cetera?

NASH: Obviously, we can because we have, but that also requires a fundamental change in the way that you train the non-special folks to do what has been a special thing. Now, we've had special training missions. You know, the Saudi Arabia National Guard mission, the School of the Americas. (Laughter.) Oh, I wish I hadn't used that example. (Laughter.) Anyway, but I mean we've had the capability to train in the mere regulars for a long time. But as you looked at what took place in Iraq, that aside from some strategic decision issues that -- (inaudible) -- it took a long time to mount that program, and it took some of the Army's best devoted to it to get to merely adequate, so it's not a quick thing.

Now, frankly had that been an all special operations force, it'd probably wouldn't have been much better given the circumstances of Iraq because even their training mission in the Special Forces community is more retail than wholesale, in my view, of doing it, and of course the Iraq army is a wholesale operation.

If you looked at other missions, you know, you look at the field of aviation, the types of aircraft the special operation forces use, the amount of training hours -- if you try to -- you could move some more units to that category, but that's a lot of money and a lot of time training because it is a buildup. I mean, there's a reason the 160th, for example, at Campbell spends a lot of time flying, a lot of time flying at night and a lot of time flying in adverse conditions. Well, that's a very busy op tempo that they go through, with actual operations on top of that.

NASH: Scott? I'm sorry, Doug. I cut you off.

Anyone else? Sir?

QUESTIONER: For Steve. I thought you kind of framed it very well that QDR did not do the trade-off between the high-tech and the low-tech like the way they stated it up front.

BIDDLE: I'm not sure that they stated it that way.

QUESTIONER: Sorry?

BIDDLE: I'm not sure that the --

(Cross talk.)

QUESTIONER: For example, I've heard Ryan Henry -- was there from the day one talking about an overmatch in traditional areas and not quite stating it -- you're right perhaps -- but suggesting that that meant that we're going to shift resources away from one into the other. And sort of, midway through the process, Ken Krieg -- in his first public appearance Ken Krieg gave -- defense undersecretary in charge of acquisitions sort of talked about the military industrial complex and asking the question that the military is going to have to do a lot of things in the future and there's only going to be a little bit of money, so something has to give. Sort of raising again the question of that something would be the high-tech weapons.

Having said all of that, I'm wondering if you -- any of you have an insight into why that trade-off between high-tech and low-tech didn't happen and why they kind of compromised and said we'll do both?

BIDDLE: Well, let me answer this way. To give you a proper answer to that question would require having been in the room when the key decisions were being made, which I wasn't.

QUESTIONER: Sure. I mean from what you've gleaned from conversations.

BIDDLE: Well, I mean, some of the speculation that I've seen in the press has been that Rumsfeld was preoccupied with Iraq and as a result didn't manage the QDR processes as aggressively as he might have and therefore no painful choices could be drawn because no one wanted to be the bill payer, but that's just reporting that I've heard elsewhere in the press. I've no independent knowledge of that.

For whatever it's worth, no government -- no person likes to make trade-offs. It's an unpleasant activity whether it's the family budget, the national budget, a service budget, or anything else, so it takes a lot of caloric expenditure from somebody if you're going to compel a painful choice to be accepted. One can observe the painful choice wasn't made here. One might infer from that perhaps it was due to a lack of effort -- (inaudible) -- senior levels, but again I'm just speculating. I wasn't in the room and can't really say.

QUESTIONER: One of the things I've heard from talking to people on the Hill is that there is no consensus on what constitutes irregular war; that there are lots of people, different constituencies on the Hill that aren't quite convinced what regular warfare is, so they were not comfortable with the idea that the Pentagon might make the choice between this and that and then go in one direction. But they were still not convinced that that's -- you know, this isn't their definition of irregular warfare.

BIDDLE: Well, that's not very well-defined anywhere and the Defense Department doesn't have a very sound definition of irregular warfare. It's kind of everything that isn't regular.

QUESTIONER: Right. (Laughter.)

BIDDLE: That's one of the challenges in doing the planning associated with if you chose to do it transforming the military to be more oriented towards lower intensity undertakings. Lower intensity undertakings is a pretty diverse basket of things that could require very different kinds of units, very different kinds of equipment, very different kinds of training. What exactly do you want when you say that we should reform the military to do low intensity missions better? A lot of different answers to that out there. So I mean, that -- again, one might speculate along the lines that you're suggesting that the fact that there isn't a single compelling alternative model of the low-intensity military that we could just go buy would tend to strengthen the forces supporting a higher-tech military whose nature and shape we understand and can talk about and (inaudible).

HOLTZ-EAKIN: I'd give you a different -- I'm the new guy to this. I mean, I ended up in QDR-land only because I followed the money and -- but when I first heard about this exercise, the way it was described to me was, well, you know, what you do is you go out and you think about how you like to run things independent of what it costs. You do this literally on the basis of capabilities or however you want to frame it up.

And one explanation is there isn't a clear vision of the discrete choice between this type of army versus -- or this type of military versus another. Another explanation is that's not really how it happens; that they're terribly cognizant of the constraints, and this budgetary being one of them, and that what you got out was this sort of mixed, muddling along approach because the constraints are overwhelming. They haven't sold the Hill. I think that's pretty clear and so they're going to try to keep them happy. Witness the quick backtracking on the reserves. I mean, there was just no way that was going to hold.

So you got that, I mean, and most of the things when you look at the kinds of things that have been floated as part of the discrete transformational vision -- let's bring all the troops home, for example; take an extreme version -- it costs you money up front. It doesn't save you money. You've got to close bases there that you just can't move the people back that will match the bases we have here, so you actually have to build facilities. You know, they are fighting a war in Iraq and there's not money lying loose in the streets of Washington. They come up with a vision that says, "This is great." It's going to cost you some money and everyone goes, "Whoa." So I think they just sort of tried to do the parts that involved R&D, push it out, keep the conventional structure to the extent they can and push it out.

I don't think that's terribly shocking. I think that's just trying to get through in a tough sort.

NASH: And whether it was accidental or -- right. Yeah, whether it was accidental or intentional or, you know, recognized before or after the fact, but by making a decision to move the timing of the QDR to align with the budget submission, you pushed the whole process back into a period eight months before midterm elections, okay? That is not a good time to be -- to make hard choices on spending around the country, and so, I mean --

MR.: Right.

NASH: -- like I say, that's not an accusation; that's an observation on the results.

HOLTZ-EAKIN: I think Steve is right. None of us were in the room, so we don't really know.

NASH: Yeah.

HOLTZ-EAKIN: But there were a variety of things that are consistent with these.

NASH: Linda?

Q: Yes, two questions and just a quick comment. My understanding on at least the Special Forces side of it is they have filled the slots since 9/11, but there's a lot of skepticism about this growing by one-third unless -- I mean, they are getting some from Army -- I mean from Navy and Air Force and the X-ray program.

(Cross talk.)

NASH: And that will be another interesting impact to watch as it becomes -- as more services participate in higher percentages and how they are able to integrate all that. It will be fun to see if they pull that --

QUESTIONER: So I -- but I'm just hearing a lot of skepticism about that number: one-third on that (as of time ?). My questions are -- and I apologize for coming in late if you already addressed this, but I'm curious about what you think should have been the major weapons trade-offs in terms of, I guess, the big ones. I mean, for the Army, the Future Combat Systems, the DD(X), the F-22. What were the things that should have been cut if you agree that there needs to be a shift of resources to fund some of these new things? And even if they are lower dollar items, you know, where do you think the shortfalls are?

My second question is on irregular warfare. Do you have any sign of whether the Army is -- I mean, there are some signs they are embracing it, but what would really signify that they are embracing that and that's partly in their own budget the funding of things like MPs, military intelligence, EOD -- I mean, that whole basket of things even though it's amorphous -- what everybody is saying not conventional.

BIDDLE: Well, let me start with a question you didn't ask but is related to all these, which is one-third and 15 percent. I mean, there are two different numbers that are being tossed around in respect to SOF. One-third increase in the number of battalions but only a 15 percent increase in the personnel strength, so there's also a degree of reorganization going on that's designed to produce more deployable units. The reason why I think there hasn't been a rebellion in Special Operations Command over this is because they are not going to increase the actual number of people by a third. If they did that, my sense is that the officers in question would refuse to do it because they would be concerned that it would water the quality down too much. So much as the regular Army is being reorganized to produce more deployable brigades, so they are trying to do the same thing with SOF.

As far as which programs should be the bill payers if you were going to do a low-intensity focused military, I don't think I'm going to surprise anybody with the list of usual suspects: the F-22, the JSF, the Future Combat System, Navy shipbuilding. It is more or less a standard list; BMD programs, for instance. I think the issue there is less what would be the bill payer if you were going to get serious about low-intensity conflict and more is anybody willing to do it given the political costs of doing that? The pushback you get from the services, but also the rebellion on the Hill that goes along with cutting big-ticket weapon programs.

Let's see, with respect to the last question, is this Army serious about counterinsurgency and how would one know? I'm actually -- my position on this is somewhat unorthodox, so let me give you what I think and then I'll give you a view that might be more widely held. I actually think that a balanced general purpose force structure is the right one for doing counterinsurgency; that you would -- the way the military looks physically -- how many battalions of what kind, what troop strength, all those things -- I don't think changes all that much if you were going to design a military for counterinsurgency. There are those who believe otherwise, but that's my feeling on it.

What does change is training syllabi and what does change is culture and promotion methods. If you really wanted the Army to focus very intensively on counterinsurgency, you stop training for high-intensity warfare or at least you radically reduce the amount of that that you do. And secondly, you promote officers who are good at this sort of undertaking who are not necessarily the kind of officers who are good at major combat. I mean, there is a lot in the QDR, for example, about cultural change. Now, that's a big word that can mean a variety of things. The first-order implication of it is that we want people who understand Islam and are comfortable working with Muslims. Another aspect of this, though, is you want a military that does not instinctively use firepower to solve problems --

NASH: Right.

BIDDLE: -- and that's willing to take risks and force protection in order to closer contact with the population. Now, the kinds of officers who are absolutely the best -- the hottest thing going at the National Training Center shooting up fields of tanks and armored personnel carriers -- tend to be fish out of water when you then drop them into a counterinsurgency environment, and vice versa. So I think to the extent that one wanted the military to focus exclusively or overwhelmingly on low intensity missions, counterinsurgency, nation-building, and the rest, it would be hard to observe without careful study of the organization because the things that are easy to see -- how many battalions of what kind -- wouldn't change that much. The real shift would be in things like culture, training syllabi, the software of the organization, and that's harder to see.

NASH: Boy, am I glad Steve said all that. (Laughter.) I think he's spot on. When you write a document, as the QDR does, and you say it's the thinking of the senior civilian and military leaders of the department, that they realize, quote, "That everything done is this department must contribute to joint warfighting capability," it's a statement of the failure to recognize the non-killing aspects that are absolutely essential for the defense of the nation. The defense of the nation is not all about killing and joint warfighting. And that's -- and Steve -- most of the Delta and the counterinsurgency capacity is politics and economics and social, okay, that you've got to bring to bear. And the good guys -- and the sadness of all this is there are some geniuses in the United States Army and Marine Corp and Navy and Air Force, but there are some geniuses that are doing it, but they are doing -- you know, the famous First Calvary Division's tour in Baghdad is an example of some innovative thinking, okay? Petraeus, God bless him, up in Mosul.

BIDDLE: McMaster right now.

NASH: McMaster, yeah. I mean, there are some really good guys. And he's right: culturally, you could do both if you teach them to do both, but that takes an institution that does it, and it has to be honorable to do it. The book is -- so I read Tom Ricks couple of Saturdays or Sundays ago and he's talking about this book that's going off the bookshelves out at Leavenworth, this Galilu (ph) or whatever his name is, counterinsurgency theory and doctrine. And I looked at that and I go downstairs and I rumble around some bookshelves and I pulled it out. And I don't want to say I'd had the book a while, but it had my West Point company designation on the inside cover. (Laughter.)

BIDDLE: Reinventing the wheel, you know.

HOLTZ-EAKIN: One additional point on that: you can teach people to do both if you train them, but training time is just like the budget. I mean, there are only so many hours in the day and the Army instinctively tends to believe we'll do everything and everything will be done with a high degree of perfection.

MS. ROBINSON: Right. Flexibility is the code word for we'll do it all.

BIDDLE: To the extent that you believe that the U.S. Army went into Iraq ill-disposed for doing counterinsurgency, in part -- and that it's culture is inappropriate for that, in part that's the price you pay for the extraordinarily high capacity they had for doing major combat because they spent all their time on that mission and, boy, did they get good at it. Now, balance -- I'm a big believer in balance -- decathletes as opposed to sprinters and all of that, but decathletes cannot compete in the Olympics in their individual events. To the extent that you're going to have people doing more training and counterinsurgency, you're going to accept the cost in their ability to do other things. And it's probably appropriate under the circumstances but it's not free. And there's a certain tendency, especially in documents that avoid choice-making as aggressively as this one does, to just sort of blandly assume that you're going to get everything by asking for it, and it's not going to work that way.

HOLTZ-EAKIN: I just want to say from the budget point of view -- I mean, I think the stress on people is really important because the way you frame this (has to be ?), what are you going to get rid of? Get rid of the F-22, the Joint Strike Fighter. None of that solves the budget problem in the long run. The people are really expensive. You know, we're spending about the same in real terms now as we did in 1985. The military used to be 2.2 million people, now is 1.2, 3 -- I forget the number. They're going to get more expensive, not less, so even if you threw away all the new toys, you'd be faced with a very pricey military. And the only way to keep the budget in control is to actually scale back the number of troops. No one feels comfortable going there. So you've got to get the most you can out of every soldier now because they are expensive.

NASH: Sir?

QUESTIONER: Yeah. Can I ask you a question on the nuclear forces and missile defense, which hasn't come up in this discussion? How do you see, in terms of -- especially following on the Nuclear Posture Review how this advances the discussion, (were there ?) significant changes, same trajectory, especially on the Nuclear Posture Review and any shifts on missile defense that you think are significant -- (off mike)?

BIDDLE: I'm not the best guy to talk to on the nuclear side of things, but my sense was that it was much like the rest of document: there wasn't any fundamental change presented to us here. To the extent that one did a very careful side by side comparison of the Posture Review and the QDR, you might see some daylight if you compared them carefully, which I have not done. But there are no, sort of, declared major departures in the QDR on any of those issues.

QUESTIONER: Missile defense. I mean, in terms of, you mention this as one of the budget cut (potentials ?) if you were going to do that.

NASH: You want to --

(Cross talk.)

QUESTIONER: Is there any potential for that or I mean what's your sense on --

(Cross talk.)

QUESTIONER: -- make sure it's urgent in some ways -- and at least to the constituency compared to the fighter planes and other things.

NASH: Thanks, Doug.

BIDDLE: Well, I mean, the document doesn't trumpet missile defense to the degree that it probably would have before 2001, for instance, when this administration ran on that as an important policy issue, but it is in the document. They do -- one of their major focus areas is on dealing with weapons of mass destruction. And in the basket of techniques by which they say they are going to deal with the threat of weapons of mass destruction is ballistic missile defense.

Now, if one were going to try and read the tea leaves, is the fact that they say ballistic missile defense is one of those long tick-list of things mean that they are less committed to it now than they used to be when they were yelling, "Ballistic missile defense," as loud as they could? Perhaps, but again I don't have any firsthand evidence because I don't sit in the councils where those choices are made, but again it is described as one of the things that they need to do in order to respond to one of the threats that they view as really central to national security, so it is there.

NASH: And one of things -- just to jump on that -- if you say the issue of proliferation is a major concern for the security of the United States, okay, short, medium, long term, how does the defense budget fit into a larger U.S. national strategy to counter proliferation? And having missiles on alert, having research and development on even better nukes, you know, and the like is -- I would argue does not make somebody else think that we're serious about denuclearizing the world, you know, type thing. And so I guess I would throw a big pile of nuke programs, Linda, on your list of trade-offs that Steve talked about earlier as another area that should have been explored. Keeping your long-term wedge in, but your near-term requirements are probably pretty fairly reduced from days of old.

Julian?

QUESTIONER: At the risk of stepping out of the QDR into the budget, I'm interested in what you think about this increase in funding for the ID Task Force; if throwing money at the problem is going to do anything or if it's a roadside bomb is just what it is?

NASH: You know, they asked me the same question when I came back from Bosnia 10 years ago about the mine issue, okay? And, you know, what have we got to do? And I say, a very simple answer: you've got to develop a way to see through dirt. (Laughter.) Okay? Now, we have a larger issue. You know, the term "nuclear IED" has now been invented, and so now you got to see not only through dirt, but you got to see through concrete, you got to see through a lot of different other things to try to work that issue. So I think it's a very important technological issue that ranges from what the threat to the humvee to the threat to New York City, okay? If it's a larger -- and I suspect Monte Meigs has got a big enough mine that he's going to make this thing, you know, more than work in the airport road. (Laughter.) You know, I mean -- and so I think that's an area, but it's got to be approached in a holistic manner, not just an Iraq issue.

BIDDLE: Given the severity of the problem, I think it's reasonable to throw some money at it. That having been said, I think in most defense issues most of us tend to overemphasize technology -- the hardware at the expense of the software.

NASH: Yeah.

BIDDLE: And the primary way that the IED problem is either going to be solved or not is tactically. Keeping -- for example, having snipers observe stretch of roads so you see the thing being planted in the first place; training the troops to look for the telltale signs of an IED may be near. None of that is to say that we shouldn't spend what we need to spend in order to do the best we can with technical countermeasures, and some of them can be very helpful, but at the end of the day I suspect that, as with most things, the biggest leverage on the IED problem will be training and tactics rather than the development of technical countermeasures.

QUESTIONER: Is that what General Meigs' appointment signifies, that is, that the Army has -- well, somebody's recognized that the answer to this is going to involve banging a lot of heads in TRADOC and other places and a four-star can do it, whereas a talented one-start can't?

NASH: Yeah. And Monte Meigs is a near genius.

QUESTIONER: Yeah.

NASH: I mean, he is a really smart guy and he's got a technological knowledge as well as soldier's perspective on life. You know, there is a major difference between the two, but -- (laughter) -- and so I think he's an ideal guy because he'll take an approach, plus he could bring a lot of -- he knows more people than a one-star does.

QUESTIONER: May I ask a question about China?

NASH: Huh. It's funny you should ask about China. Go ahead.

QUESTIONER: (Laughter.) This notion of countries at the strategic crossroads, and it seems for me the part dealing with China is rather odd insertion. You know, it's hard to see the cohesive idea throughout which connects it with the other parts. And since you touched upon the -- with working with partners, you referred to NATO, but there's no NATO in Asia. How do you -- I mean, you know, the idea of the shift toward specifics is okay, but how -- my question would be how do you implement this under this QDR?

BIDDLE: See, only part of that can be dealt with by the Defense Department, so (to some degree when ?) you deal with a Defense Department document, you're going to get a relatively tunnel vision look at the big, important problem like how we -- (inaudible) -- especially when one of the big issues -- the relationship with China -- is how do you keep it from becoming conflictual? And a lot of the answer to that question is outside the Defense Department's domain, so one wouldn't expect to see that in a QDR necessarily.

What you do see in the QDR is a lot of talk that amounts to how can we deter the Chinese? I mean, one of the several avenues one might pursue for keeping the relationship cooperative rather than conflictual is cause the Chinese to believe that if they do become hostile towards us they would lose in a fight, so there is a lot of discussion there about how you would do that and the kinds of things you would (want to buy?).

And part of the problem with the document in terms of it's failure to make choices is that at the end of the day they don't make up their mind about are we more worried about the China threat, for instance, and the collection of things you would need to do in their view to deter them from a more conflictual path, or instead do we worry about low intensity. They try and do everything.

QUESTIONER: Right.

BIDDLE: Now, a second dimension of tension in all this with respect to the way they deal with China is there is some discussion in the early part of the document about how we are going to do less by way of responding to traditional threats, and instead we are going to reorient towards non-traditional and emerging challenges of three different sorts. The programmatics don't ultimately support that very well, but at least there is some wording up front about how they are going to do that.

Part of the problem there, though, is that the response to China is in a sense a very traditional threat. This is a potential great power. It probably requires capital-intensive solutions, or at least most people thinks it does. If you really do believe that China is a big problem, you end up in the lower left hand cell of this quad chart, as they call it, for describing future threats, and all the arrows in the chart point out of that cell and toward other things. So, again, the document isn't -- at the end of the day doesn't do a very good job of making a choice. For example, among the cells in the quad chart, it ends up trying to do everything at once and part of what's it trying to do is to deter China from taking an aggressive path.

QUESTIONER: Right. Did you detect any interservice difference? I mean --

NASH: What was the question?

QUESTIONER: How -- did you sense any sort of interagency, interservice difference of culture, shall I say?

BIDDLE: Well, I mean, when -- at the beginning of the process when people thought that this was going to be a big choice, one of the dimensions of the choice was interservice. I mean, the way it got framed up at the time is, if you go with the high-tech version of transformation aimed at challenges like China, that favors the Air Force and the Navy and it hurts the Army and the Marines. If instead you shift, then you get the opposite effect: money comes out of the Air Force and Navy accounts and into Army and Marine accounts. Now, this is not explicitly a budget document, but there's nothing in here that would lead one to expect any kind of resource reallocation of that kind.

QUESTIONER: Going back to the earlier question on the trade-off between high tech and low tech, it seems as if there is a powerful voice in the Pentagon that worries about China. And one of the arguments that I hear, for example, taking the specific example of why didn't the QDR trade-off, let's say, F-22 in favor of something else -- the argument of this particular voice in the Pentagon seems to make is China is already at the stage of being able to produce what they call a fourth generation tactical aircraft fighter, and that would put them on par with, let's say, the U.S. F-16s. And if the United States has to keep ahead of China, then the only thing left is the F-22, which is the fifth generation stealth and so forth. So that by itself kind of argues for keeping that one high-tech weapon in the mix.

But I'm wondering, how would you respond to that? Put that way, it looks as if the QDR meant the right thing by just kind of, you know, keeping their hands over here and here, but I'm trying to see how you would respond to something like that?

NASH: Oh, I -- Yeah. One of the things -- just let me start this one off real quick because it kind of added -- I wanted to add it on earlier. Go back to the summer of 2001. We're taking about P3s being forced down. We're talking about a confrontation with China that seemed to be at the forefront of the agenda. I mean, this is what they doing when they were pushing Richard Clarke aside on the counterterrorism stuff, okay? So there is a strong theme to that, and I'm more fascinated how they raised the issue of India in this thing because it was in friendly terms, but it was, you know -- I mean, suddenly India is in a defense document, you know, and so China thing -- so there's a -- there is an element, in my view, within the Pentagon that remains very concerned with that and the propensity is in a confrontational approach as opposed to a non-confrontational.

Now I'll let Steve give you a good answer.

BIDDLE: Well, just on China and the F-22, the F-22 is a wonderful airplane. I love the F-22. I would dearly like to get a backseat ride in one someday. All of these programs are wonderful things. The problem is in order to get them you have to give up something else, and so the difficulty with the F-22 and China is not the F-22 just won't work and we just don't need it. A, it will work. Of course, it will improve our capability and China is a consideration that anybody would reasonable think you have to prepare for.

The problem is you can't do everything at once, so you have to give up some things that are good to have and you can make good arguments for in order to do other things that are more important. Now, generally speaking my take on issues like that is that we're better off giving up cutting-edge technology in order to retain other things because I think the community at large tends to exaggerate the military utility of technological sophistication and tends to underplay the military utility of skill, training, motivation, the kind of software and soft factors that contribute, I think, centrally to military outcomes.

And given that sort of general philosophy of what produces military success in the world, I look at the F-22 versus current cutting-edge Chinese aircraft, I say what happens at a dog fight is partly the machine you're sitting in, but it's very largely the pilot behind the controls and the institution and organization that's supporting it all. I mean, you've got to generate sorties. You've got to be able to sustain a combat effort over an extended period of time. And I think the kinds of supporting infrastructure, software, training, and skill is an area where we're likely to retain our current lead for a long time. And I think it tends to offset some potential worries with respect to technological competition, which is not to say that those worries aren't real or legitimate or any of the rest. Of course, they are, but you've got to make choices. And if the choice before us is the F-22 and the FCS and Navy ship building and BMD at the cost of quality of life (accounts ?) that retain good people, force structure, training, and the rest, then I'd rather cut back on the big-ticket technology programs and retain the software.

QUESTIONER: Let me ask a question on that. I mean, Doug is not here and he probably would have been the one to direct this to, but are they being forced to make any choices? I mean, Congress is not going to -- you know, is letting them get away with every request that they have for the last years. They didn't -- if they have anything that doesn't go on the regular budget, they throw in a supplemental. In fact, election year they've got two years left in the president's term, they don't seem to have any commitment to having a balanced budget or anything close to it, so --

(Cross talk.)

MR.: In fact, Rumsfeld at the budget meeting said that the budget is -- the defense budget is only 2.7 GDP; you've had in the past 10 percent GDP, so people shouldn't be worried.

BIDDLE: Well, I mean, Doug is the right guy to answer that. Having said that, I'll now wander into somebody else's domain anyway. Wants always exceed resources, and in the defense world they really exceed resources. Part of the problem with all these big-ticket capital programs is that the decision now implies a budgetary responsibility downstream. To say that we are going to go forward with the FCS or with any of these programs is relatively cheap right now. You're funding research and development and testing and all that, but sooner of later you're going to have to start buying these things as they roll off the factory floor, and that has a huge bill associated with it.

So what happens when we simultaneously proceed with the development of a gazillion programs like this is they end up coming crashing down on you all at once in the out years and present you with a bill that now even with a compliant Congress you're going to have a hard time paying. Now, at some level the person asked about this, of course, my 8-year-old daughter since she is going to end up paying for this. But Doug is the right guy, but my sense as a non-budget expert is nonetheless that the simultaneous funding of this number of high-tech capital programs is going to create a big crunch that even this administration would have a hard time getting through the Congress down the road.

NASH: We're getting close to wrapping up. Go ahead, then I want to tell you a couple of things I think that you ought to work on.

QUESTIONER: A wrap up sort of question. I originally wanted to ask whether we learned anything from this QDR. I think collectively I've realized -- and maybe I'm mistaking -- not much, which then begs the question, do we even need something like -- it seems to me that the changing dynamics year by year has caused this let's keep our hands on everything: low tech, high tech, this and that. China is -- are they the real threat or the al Qaeda-type are the real threat? Do we need QDR? Does it have to be an annual kind of assessment of what we need and where should we be going? So I just want take it -- get your take on that.

NASH: Good.

BIDDLE: Okay. I'll start. You can lead the horse to water, but you can't make it drink. The Congress can mandate a study, but that doesn't mean the study is going to be taken seriously. You cannot by legislation compel an organization to make these kinds of hard choices by mandating a study. Now, at the margin, does it help bring about more searching consideration of things? Yes, in part because it leads to confabulations like this where the document creates an event. The event causes people to think and talk, that advances a debate, and I think there is some utility in that.

It certainly caused a lot of discussion around the defense planning community. At the end of the day, it didn't resolve most of the questions that it was nominally intended to resolve, but I think it's probably still a helpful undertaking for the government to do. But that's different from saying that if we made the QDR annual instead of quadrennial then we'd get resolution to these questions. We just get a more frequent conversation like this which might attract less interest around the room if it happened every year.

I think in a larger sense, documents like this have a useful purpose that's not quite the same as the nominal purpose that was written into the legislation.

NASH: We had the vice chairman over here the other day talking about the QDR, Admiral G as I call him affectionately, and the question I wanted to ask him was how did you guard against group-think as you went through the QDR process? And my answer to that question is any time you do an internal review like that, you don't, because it's every -- especially if you do it the same time you're trying to put a budget together because -- (inaudible). And I would tell you the right question is not the Quadrennial Defense Review, it's the Quadrennial National Security Review which is much, much bigger than the defense department. And so you cannot ask, and I don't want to -- I want to be careful because I don't want to disrespect people that work very hard, but you can't ask the organization to review the organization and expect anything other than --

MR.: Group-think.

NASH: Huh?

MR.: Group think.

NASH: Group-think. I mean that's -- you know, you do that in your media organization. You do that at the Army War College. You do that at the Council on Foreign Relations. You know, I mean, it's just because you -- so it's got be something outside and it's got to be larger, because the challenge we're facing -- national security of the United States -- is not fundamentally military, okay? And until we make that transition, we can do F-22s or Future Combat Systems all we want, and missile defense, but we're not dealing with the issues that are threatening the security of the United States type thing.

Few questions you have not asked and I haven't seen enough on but I would urge you all to explore: are we or are we not facing a recruiting issue in the long term prospects of our force and the associated retention business? And I think -- the sergeant-majors tell me it's bad.

MR. BIDDLE (?): Yeah, and they're right.

NASH: Okay? Yeah. And these are the same guys that are scrambling and talking to you about how hard they are working.

MR.: Twelve percent of October recruits were Cat-4s.

NASH: Yeah. Which directly leads to the next question I would start tracking is and -- I can't find it now, but again in part of the preface one of the great things about the prejudice against the institution -- institutional armed forces. I wanted to say institutional Army, but institutional armed forces. There is an erosion of investment in the school house, the officer-producing entities, and those things that give -- that are relatively cheap but don't give you something at the end, and it takes 20 to 30 years to produce their thing but -- and so therefore it's just easier not to do it. And so there's a watering of that process that I think we need to guard against because the only thing --

(Cross talk.)

MR.: Trading off -- trading off long term benefits for a short term gain in force.

NASH: Yeah. Right. Type thing. And so --

MR.: That's how you get your Lieutenant Kellys (sp).

NASH: Well, it is. It is. And it's how you get -- it's how you get your Abu Ghraibs, too, by the way.

MR.: Yeah.

NASH: Because you just don't have all the foundations there that cause people to do the right thing when nobody is watching. With that, thank you very much for coming. Steve, anything you wanted to get in that you didn't get in? No? Steve Biddle is here, open for business. (Laughter.)

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